Free Trade vs. Fair Trade? Which are you? Explain.?

Answer 1

Actually i dont really know the difference?? can anyone enlighten me? I know that Free Trade really help my country to flourish.. so is it good??

Answer 2

Fair trade would have been my preference. But free trade is for people with the word "greed" spelled on their fore head. Westerners preferred this because of their nature of capitalism. If I can suckered you into buying my defected software with say my own cost of $1.00, and sell it to you for $15.00, then I have made a profit of what is called free trade. But usually, this terminolgy is used with foreign trade that I should be able to market and sell my products within any company as I should see fit. Do you see the capitalism nature of this yet. But fair trade usally on happens with private parties only. Like I'll let you burrow my book, if you let me burrow your computer. All is fair, and now looses or gain.

Answer 3

Free Trade is the winner

Answer 4

Depends on whether you prefer a short-term or long-term perspective. "Fair Trade" helps in the short-term, but because it is based on the 'infant industry' perspective, it is inherently a protectionist action that may prevent an industry from ever growing up.

Free Trade is, supposedly, the most efficient choice in the long-term. When that long-term is, and who is going to take care of all the unemployed, is another question altogether.

Answer 5

fair trade and free trade are a pipe dream. it would be nice, but as long as there are poor countries like mexico where the labour is dirt cheap and rich countries not unlike ours[can.and u.s.] there can never be fair trade. where the heck are the benefits for the working people or the poor. hell, nobody wants to work for a meager wage. and goddamn it these countries have enough of us working for less than what is considered a fair wage. no, you know who benefits?not us.it's big business. thats who.

Answer 6

OPM knows more than God I bow down and worship at his feet, long live free trade

Answer 7

There is no difference except as a line for those who oppose free trade.

True free trade would mean that any willing buyer could buy from any willing seller. It also means that any willing seller could market their wares to any buyer.

Some view this as unfair. People who view it as unfair are people who are not competitive enough to keep their job. They cannot offer the quality, product, value and service for the same money as someone else. They usually were the prior provider of service. They scream to their political representatives for help.

The problem is that they weaken their own economies. For example, about five years ago Congress passed a special minimum price for milk in New England.

I don't remember the specifics, but here is an example.

Lets assume that the price of milk in the free market at the time was $1.00 per gallon and the cost to produce was $0.99. Famers start losing their farms or switch to some other product. Farmer's cooperatives scream that it is unfair for family farms to fail in favor of industrial farms that are thriving.

Let's assume Congress sets the minimum price as $2.00. What do you think happens? First, milk demand falls. Milk as a central product does not fall as far as would other products but it falls. Lets assume it went from 10,000 gallons per day to 9000 gallons per day. Farmers went from making $100 per day to $9,090 per day. A huge windfall.

Now, it wouldn't be a big deal, unless you see what happens next.

You can only make money from the sale of milk if they buy your particular milk jug. Anytime you offer to make someone that much profit on a gallon of milk, they will strive to get their milk in front of your face, so they will expand capacity and produce more instead of less. Further, since they have $1.01 to work with instead of the 1 cent profit, they feel no need to restrain their costs to produce this extra milk.

So now, lets assume that they hire additional people and borrow money from the bank to buy more cows and equipment. They go from 10,000 gallons per day to 12,500 gallons per day. They are still only selling 9,000 per day but it is now an issue of market share. On average, the farmers are selling less, but the farms that can produce the most can gain even more milk share and even more profit than they were when they were restrained. Let's assume the additional 2,500 gallons cost 1.25 per gallon to produce.

A new administration is elected or the law expires and New England milk prices revert to market levels of $1.00 per gallon.

What happens?

The small farmer borrowed money to keep up and must get $1.25 to keep their farm and maintain their covenenants with the bank. Mostly small farmers lost share, so the profits went into the stock market not the small farmer. Many people who used to drink milk have by now switched to another product and won't switch back so now demand is 9900 gallons per day. Profits used to be one penny per gallon but now most farmers cannot make that.

"Fair trade," is a slogan. It is very dangerous and causes enormous damage. My own local economy has finally recovered from such a decision in 1972. It took to 1995 for it to recover.

In the mean time, during the milk subsidy period, money that would have been put to productive purposes within New England were instead sent primarily to corporate shareholders as profits and the government as tax. New England lost overall production usually as a multiple of the subsidy, because not only did the subsidy go out of the economy but any added benefits from allowing people to follow their own self interest.

Answer 8

If the polotitians agree it is good then I would naturally take the opposite view.......